Sydney new apartment supply steadies as construction continues

Price was a factor which may have kept the majority of Sydney sales local. In 2017, the weighted average sale price in Sydney was over $1.1 million. Across the nation in Brisbane, Perth, Melbourne and the Gold Coast, the 2017 weighted average sale price ranged from the low to high $600,000s.     

The weighted average sales price for the December 2017 quarter was $1,110,463 in line with the 2017 average. At a product level, the weighted average sale price of two-bedroom, two-bathroom and one-bedroom, one-car apartments increased slightly over the previous quarter. All other product types registered a slight decrease.

Ten projects, containing 2,255 apartments launched in the quarter, compared to fifteen projects containing 2,115 apartments in the previous quarter. Looking ahead, four projects are containing 2,097 new apartments which are expected to launch in the next quarter. New project launches are expected to slow down as developers concentrate on selling and completing existing projects.

Apartment approvals remained steady at 2,972 apartments in Q4 2017, however annually, comparing 2017 to 2016, new approvals decreased by 40%.

Mr Stuart noted, “In 2016, over 22,000 new apartments were approved across Inner Sydney, in 2017 that figure decreased to over 15,000.”

“However, comparing the December 2017 quarter to the December 2016 quarter, in this quarter only 24% of actively selling projects were in a presales phase compared to 33% a year ago. Over 31,000 of actively selling apartments are under construction or have been recently built, a year ago this figure was just over 24,000.”

Though new approvals have slowed after the peak witnessed in 2015 and 2016 – a large number of these projects have now reached the construction phase.

“The cranes across Sydney have come up and they will be decorating our skyline for a while yet.

“In 2017 just under 11,000 apartments were built and settled across Inner Sydney. In 2018 that figure is expected to reach over 18,000 apartments. Sydney apartment developers are in the delivery phase, and whilst we might not see as many new development approvals coming through, it is positive to see new developments being built and filling up with residents.” concluded Mr Stuart.

• 227 sales, from a sample of 29 surveys, were recorded in the December 2017 quarter (19% sample of the market).
• The Inner South precinct recorded 44% of total sales, followed by the North West Middle Ring precinct (25%) and Inner West Sydney precinct (15%).
• The weighted average sales price for the December 2017 quarter was $1,110,463 in line with the 2017 average of $1,130,000. At a product level, the weighted average sale price of two-bedroom, two-bathroom and one-bedroom, one-car apartments increased slightly over the previous quarter. All other product types registered a slight decrease.
• Two-bedroom, two-bathroom apartments were the most popular product type, making up 44% of total sales, compared to 32% in the previous quarter. One-bedroom apartments without car park apartments made up 21% of total transactions.
• Owner-occupier sales accounted for 51% of sales this quarter, followed by local state investor sales which made up 25% of sales.
• There were ten new apartment launches this quarter, equating to 2,255 apartments